Employees of the State of Wisconsin Investment Board will receive a total of $9.8 million worth of bonuses this year, SWIB’s board of trustees said Friday.

That is 15 percent below the $11.6 million in incentive pay awarded last year, and it’s the smallest bonus pot paid since 2013. A record $13.8 million in bonuses was paid in 2017.

This year, no one will get a bonus of $400,000 or more. In 2018, four SWIB executives topped that amount; the biggest bonus was $529,576.

SWIB manages $110 billion of assets. The Wisconsin Retirement System (WRS) funds account for the lion’s share of that — $101 billion.

With the wobbly stock market late last year, the WRS’ primary Core Fund emerged with a preliminary annual return of minus 3.3 percent and the smaller Variable Fund had a preliminary return of minus 7.9 percent, as of Dec. 31, 2018.

But it is SWIB’s performance over the last five years that is considered in determining the incentive compensation payments.

The five-year return for the Core Fund was 5.2 percent and the 10-year return was 8.8 percent, before fees and expenses were taken out.

Nearly all of SWIB’s 169 employees are expected to receive part of the bonus money. Allocations are based on “an employee’s individual contributions to the success of the organization and trust fund performance,” the agency said.

The top 5

Only the top five recipients were disclosed on Friday:

  • Chris Prestigiacomo, senior portfolio manager — Bonus $399,405; base pay $222,789; total compensation: $622,194
  • Chad Neumann, senior portfolio manager — Bonus $384,170; base pay $240,000; total compensation: $624,170
  • Scott Parrish, senior portfolio manager — Bonus $379,332; base pay $235,872; total compensation: $615,204
  • Chuck Carpenter, managing director — Bonus $301,972; base pay $291,5000; total compensation $593,472
  • David Villa, executive director and chief investment officer — Bonus $300,000; base pay $500,000; total compensation: $800,000

SWIB’s board of trustees said its total compensation plan is set up to reflect median pay of a peer group, as defined by an independent compensation consultant, that does not include highly paid asset managers on the East or West Coast.

“SWIB prides itself on its cost-effective internal management program,” said David Stein, SWIB board of trustees chairman. “Having a market-based incentive compensation program allows SWIB to hire and retain top industry talent and dedicated experts needed to maintain the retirement system and manage investment risk.”

Not from taxes

SWIB employee salaries and bonuses are paid from investment returns, not from general taxpayer dollars, spokeswoman Vicki Hearing said.

The incentive awards this year are based on the five-year investment earnings that topped general market returns, which amounted to $224.5 million for the five years that ended in December 2018.

Wisconsin has the eighth-largest public pension fund in the U.S., providing for more than 632,000 current and retired public employees.

Wisconsin’s pension system was called “best funded in the nation” in a report last April by The Pew Charitable Trusts. It said 99 percent of the liabilities of the Wisconsin Retirement System are covered by its assets — the highest percentage of all 50 states.

The report said states had a total $1.4 trillion pension funding gap in 2016, the most recent year for which calculations were made.

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Judy Newman is a business reporter for the Wisconsin State Journal.